ROCKWELL COLLINS, INC. STOCK OPTION AGREEMENT STOCK OPTION TERMS AND CONDITIONS
Exhibit
10-a-9
ROCKWELL
▇▇▇▇▇▇▇, INC.
2006
LONG-TERM INCENTIVES PLAN
STOCK
OPTION TERMS AND CONDITIONS
1. Definitions
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As
used in these Stock Option Terms and Conditions, the following words and
phrases shall have the respective meanings ascribed to them below unless
the context in which any of them is used clearly indicates a contrary
meaning:
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(a)
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Cashless
Exercise: Cashless Exercise shall have the meaning set forth in
Section 3(a)(ii) herein.
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(b)
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Change of
Control: Change of Control shall have the same meaning as such term
has in Section 10(a) of the Plan.
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(c)
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc., the Stock Option Administrator whom the
Company has engaged to administer and process all Option
exercises.
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(d)
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Committee: The
Compensation Committee of the Board of Directors of the
Company.
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(e)
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Company:
Rockwell ▇▇▇▇▇▇▇, Inc., a Delaware corporation, and any successor
thereto.
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(f)
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Customer Service
Center: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇’▇ Customer Service Center that is used to
facilitate Option transactions. Contact ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇)
▇▇▇-▇▇▇▇.
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(g)
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Employee:
Employee shall have the same meaning as such term has in Section 2(j) of
the Plan.
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(h)
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Exercise Request and
Attestation Form: The form attached as Exhibit 1
or any other form accepted by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in connection with the use of
already-owned Stock to pay all or part of the exercise price for the
Option Stock to be purchased on exercise of any of the
Options.
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(i)
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Notice of Exercise
Form: The form attached as Exhibit 2 or
any other form accepted by the Secretary of Rockwell ▇▇▇▇▇▇▇ in his sole
discretion.
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(j)
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Options: The
stock options listed in the letter dated November 23, 2009, to which these
Stock Option Terms and Conditions are attached which are intended to be
Non-Qualified Stock Options and which together with these Stock Option
Terms and Conditions constitute the Stock Option
Agreement.
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(k)
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Option Stock:
The Stock issuable or transferable on exercise of the
Options.
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(l)
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Plan: Rockwell
▇▇▇▇▇▇▇ 2006 Long-Term Incentives Plan, as such Plan may be amended and in
effect at the relevant time.
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(m)
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Stock: Stock
shall have the same meaning as such term has in Section 2(dd) of the
Plan.
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(n)
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Stock Option
Agreement: These Stock Option Terms and Conditions together with
the letter dated November 23, 2009, to which they are
attached.
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(o)
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Subsidiary:
Subsidiary shall have the same meaning as such term has in Section 2(ee)
of the Plan.
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2. When Options May be
Exercised
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The
Options may be exercised, in whole or in part (but only for a whole number
of shares) and at one time or from time to time, as to one-third (rounded
to the nearest whole number) of the Option Stock granted during the period
beginning on November 20, 2010 and ending on November 20, 2019, as to an
additional one-third (rounded to the nearest whole number) of the Option
Stock granted during the period beginning on November 20, 2011 and ending
on November 20, 2019 and as to the balance of the Option Stock granted
during the period beginning on November 20, 2012 and ending on November
20, 2019, and only during those periods, and provided that:
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(a)
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if
you die while an Employee, any person who holds the Options
as permitted by Section 4 herein may exercise all the Options
not theretofore exercised within (and only within) the period beginning on
your date of death (even if you die before you have become entitled to
exercise all or any part of the Options) and ending three years
thereafter; and
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(b)
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if
your employment by the Company or a Subsidiary terminates other than by
death, then:
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(i)
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if
your retirement or other termination date is before November 20, 2010, the
Options shall lapse on your retirement or other termination and may not be
exercised at any time;
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(ii)
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if
your employment by the Company or a Subsidiary is terminated
for Cause, (as defined in Section 2(f) below), the Options shall expire
forthwith upon your termination and may not be exercised
thereafter;
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(iii)
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if
your employment by the Company or a Subsidiary terminates on or after
November 20, 2010 by reason of your retirement under a retirement plan of
the Company, or under a retirement plan of a Subsidiary, you (or any
person who holds the Options as permitted by Section 4 herein) may
thereafter exercise Options which are exercisable prior to the date of
your retirement or that will become exercisable within (and only within)
the period between the date of your retirement and ending on the fifth
anniversary of your retirement date; or if you retire prior to age 62, the
earlier of (x) the fifth anniversary of your retirement date or (y) such
earlier date as the Committee shall determine by action taken not later
than 60 days after your retirement date;
and
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(iv)
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if
your employment by the Company or a Subsidiary terminates on or after
November 20, 2010 for any reason not specified in subparagraph (a) or in
clauses (ii) or (iii) of this subparagraph (b), you (or any person who
holds the Options as permitted by Section 4 herein) may thereafter
exercise the Options within (and only within) the period ending three
months after your termination date but only to the extent such Options
were exercisable on your termination
date.
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(c)
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Notwithstanding
any other provision of this Agreement to the contrary, in the event that
your employment is terminated on or after a Change of Control (as defined
in the Plan) (i) by the Company or a Subsidiary other than for Cause (as
defined below in Section 2(f)) or (ii) by you for Good Reason (as
defined below in Section 2(g)), then all Options then outstanding pursuant
to this Agreement shall forthwith become fully exercisable whether or not
then otherwise exercisable within (and only within) the period between the
date of termination of employment and ending on the third anniversary
thereof.
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(d)
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Notwithstanding
any other provision of this Agreement to the contrary, in the event that
your principal employer is a subsidiary of the Company, it is possible
that your principal employer may cease to be a subsidiary of the Company
and that your employment with the Company terminates as a result (the date
of such cessation is herein called the Divestiture Date). Following the
Divestiture Date, then all options then outstanding pursuant to these
terms and conditions shall forthwith become fully exercisable whether or
not then otherwise exercisable within (and only within) the period between
the Divestiture Date and ending on the third anniversary
thereof.
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(e)
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In
no event shall the provisions of the foregoing subparagraphs (a), (b),
(c) and (d) extend to a date after November 20, 2019, the
period during which the Options may be
exercised.
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(f)
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For
purposes of Section 2(b) and 2(c) termination for “Cause” shall
mean:
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(i)
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your
willful and continued failure to perform substantially your duties with
the Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to you by the
Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or the Chief Executive Officer of
the Company believes that you have not substantially performed your
duties, or
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(ii)
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your
willful engaging in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the
Company.
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For
purposes of this provision, no act or failure to act, on the part of you, shall
be considered "willful" unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior officer of the Company
or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by you in good faith and in the best
interests of the Company. The cessation of your employment shall not
be deemed to be for Cause unless and until there shall have been delivered to
you a copy of the resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at the meeting of the
Board called and held for such purpose (after reasonable notice is provided to
you and you are given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, you are guilty
of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
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(g)
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For
purposes of paragraph 2(c), "Good Reason" shall
mean:
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(i)
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the
assignment to you of any duties inconsistent in any material respect with
your most significant position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities held,
exercised and assigned at any time during the 120-day period immediately
preceeding the Change of Control, or any other action by the Company which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by
you;
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(ii)
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requiring
you to be based at any office or location other than the location where
you were employed immediately preceding the Change of Control or any
office or location less than 35 miles from such location, or if the
distance from the new location to your residence is less than the distance
from the old location to the
residence;
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(iii)
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any
failure by the Company to maintain your compensation at a level consistent
with that generally in effect prior to any Change of Control, other than
an isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by you;
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(iv)
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any
purported termination by the Company of your employment otherwise than as
expressly permitted by this Agreement;
or
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(v)
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any
failure by the Company to comply with and satisfy Section 10(b) of this
Agreement.
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For
purposes of this Section 2(g), any good faith determination of "Good Reason"
made by you shall be conclusive.
3. Exercise
Procedure
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(a)
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To
exercise all or any part of the Options, you (or any person who holds the
Options as permitted by Section 4 herein) must first obtain authorization
from Rockwell ▇▇▇▇▇▇▇' Office of the Secretary by submitting a Notice of
Exercise Form to Rockwell ▇▇▇▇▇▇▇’ Office of the Secretary (Attention:
Stock Option Administration; facsimile number (▇▇▇) ▇▇▇-▇▇▇▇) or by other
means acceptable to the Secretary of Rockwell ▇▇▇▇▇▇▇ and then contact the
Stock Option Administrator, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, by using the Customer Service
Center, as follows:
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(i)
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contact
the Customer Service Center by calling (▇▇▇) ▇▇▇-▇▇▇▇ Monday through
Friday, 9:00 a.m. to 9:00 p.m. Eastern Time and follow the instructions
provided;
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(ii)
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full
payment of the exercise price for the Option Stock to be purchased on
exercise of the Options may be made
by:
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check
(wire) to your ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ account;
or
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in
already-owned Stock; or
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by
authorizing ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or a third party approved by the Company to
sell the Stock (or a sufficient portion of the Stock) acquired upon
exercise of the Option ("Cashless Exercise");
or
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in
a combination of check (wire) to your ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ account and Stock
(whether already-owned Stock or Stock issued and subsequently sold in
connection with a Cashless Exercise);
and
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(iii)
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in
the case of an exercise of the Options by any person other than you
seeking to exercise the Options, such documents as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or the
Secretary of the Company shall require to establish to their satisfaction
that the person seeking to exercise the Options is entitled to do
so.
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(b) An
exercise of the whole or any part of the Options shall be
effective:
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(i)
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if
you elect (or any person who holds the Options as permitted by Section 4
herein elects) to pay the exercise price for the Option Stock entirely by
check (wire), upon (A) completion of your transaction by using the
Customer Service Center and full payment of the exercise price and
withholding taxes (if applicable) are received by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ within
three business days following the exercise; and (B) receipt of any
documents required pursuant to Section 3(a)(iii) herein;
and
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(ii)
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if
you elect (or any person who holds the Options as permitted by Section 4
herein elects) to pay the exercise price of the Option Stock in Stock
(whether already-owned Stock or Stock issued and subsequently sold in
connection with a Cashless Exercise) or in a combination of Stock (whether
already-owned Stock or Stock issued and subsequently sold in connection
with a Cashless Exercise) and check, upon (A) completion of your
transaction by using the Customer Service Center and full payment of the
exercise price (as described in Section 3(d)(i) herein) and withholding
taxes (if applicable) are received by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ within three business
days following the exercise; and (B) receipt of any documents required
pursuant to Section 3(a)(iii)
herein.
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(c)
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If
you choose (or any person who holds the Options as permitted by Section 4
herein chooses) to pay the exercise price for the Option Stock to be
purchased on exercise of any of the Options entirely by check, payment
must be made by:
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delivering
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a check (wire) in the full amount of the exercise price
for those Option Stock; or
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arranging
with a stockbroker, bank or other financial institution to deliver to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ full payment, by check or (if prior arrangements are made
with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) by wire transfer, of the exercise price of those
Option Stock.
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In either
event, in accordance with Section 3(e) herein, full payment of the exercise
price for the Option Stock purchased must be made within three business days
after the exercise has been completed through the Customer Service
Center.
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(d)
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(i)
If
you choose (or any person who holds the Options as permitted by Section 4
herein chooses) to use already-owned Stock to pay all or part of the
exercise price for the Option Stock to be purchased on exercise of any of
the Options, you (or any person who holds the Options as permitted by
Section 4 herein) must deliver to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ an Exercise Request and
Attestation Form and cash to cover the purchase of Option Stock as
specified in such form. To perform such a transaction, the
Exercise Request and Attestation Form must be submitted via fax (▇▇▇)
▇▇▇-▇▇▇▇ by 4:00 p.m. Eastern Time on the date of exercise and any
questions concerning this type of transaction should be referred to (▇▇▇)
▇▇▇-▇▇▇▇ (Stock Option Administration Group Hotline). The
Exercise Request and Attestation Form must attest to your ownership of
Stock representing:
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¨
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at
least the number of shares of Stock whose value, based on the closing
price of the Stock on the New York Stock Exchange — Composite Transactions
on the day you have exercised your Options through the Customer Service
Center, equals the exercise price for the Option Stock;
or
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any
lesser number of shares of Stock you desire (or any person who holds the
Options as permitted by Section 4 herein desires) to use to pay the
exercise price for such Option Stock and a check in the amount of such
exercise price less the value of the Stock delivered, based on the closing
price of the Stock on the New York Stock Exchange — Composite
Transactions on the day you have exercised your Options through the
Customer Service Center.
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(ii)
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If
you choose (or any person who holds the Options as permitted by Section 4
herein chooses) to use Option Stock obtained by Cashless Exercise to pay
all or part of the exercise price for the remaining Option Stock to be
purchased on exercise of any of the Options, you (or any person who holds
the Options as permitted by Section 4 herein) must contact the Customer
Service Center at (▇▇▇) ▇▇▇-▇▇▇▇.
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(iii)
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▇▇▇▇▇▇▇
▇▇▇▇▇▇ will advise you (or any other person who, being entitled to do so,
exercises the Options) of the exact number of shares of Stock, valued at
the closing price on the New York Stock Exchange — Composite Transactions
on the effective date of exercise under Section 3(b)(ii) herein, and any
funds required to pay in full the exercise price for the Option Stock
purchased. In accordance with Section 3(e) herein, you (or such
other person) must pay, by check, in Stock or in a combination of check
and Stock, any balance required to pay in full the exercise price of the
Option Stock purchased within three business days following the effective
date of such exercise of the Options under Section 3(b)(ii)
herein.
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(iv)
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Notwithstanding
any other provision of this Stock Option Agreement, the Secretary of the
Company may limit the number, frequency or volume of successive exercises
of any of the Options in which payment is made, in whole or in part, by
delivery of Stock pursuant to this subparagraph (d) to prevent
unreasonable pyramiding of such
exercises.
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(e)
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An
exercise completed through the Customer Service Center, whether or not
full payment of the exercise price for the Option Stock is received by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, shall constitute a binding contractual obligation by you
(or the other person entitled to exercise the Options) to proceed with and
complete that exercise of the Options (but only so long as you continue,
or the other person entitled to exercise the Options continues, to be
entitled to exercise the Options on that date). By your acceptance of this
Stock Option Agreement, you agree (for yourself and on behalf of any other
person who becomes entitled to exercise the Options) to pay to ▇▇▇▇▇▇▇
▇▇▇▇▇▇ in full the exercise price for that Option Stock, that payment
being by check, wire transfer, in Stock or in a combination of check and
Stock, on or before the third business day after the date on which you
complete the transaction through the Customer Service
Center. If such payment is not made, you (for yourself and on
behalf of any other person who becomes entitled to exercise the Options)
authorize the Company and your employer, in their discretion, to set off
against salary payments or other amounts due to you (or the other person
entitled to exercise the Options) any balance of the exercise price for
such Option Stock remaining unpaid
thereafter.
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(f)
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An
Exercise Confirmation representing the amount of Option Stock purchased
will be issued the third business day (trade date plus three business
days) (i) after ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has received full payment therefor or (ii)
at the Company’s or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇’▇ election in their sole discretion,
after the Company or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has received (x) full payment of the
exercise price of that Option Stock and (y) any reimbursement in respect
of withholding taxes due pursuant to Section 5
herein.
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4.
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Transferability;
Nonassignability
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You
are not entitled to transfer the Options except by will or by the laws of
descent and distribution.
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5.
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Withholding
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The
Company, your employer or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have the right, in
connection with the exercise of the Options, in whole or in part, to
deduct from any payment to be made by the Company, your employer or
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ an amount equal to the taxes required to be withheld by law
with respect to such exercise or to require you (or any other person
entitled to exercise the Options) to pay to it an amount sufficient to
provide for any such taxes so required to be withheld. By your
acceptance of this Stock Option Agreement, you agree (for yourself and on
behalf of any other person who becomes entitled to exercise the Options)
that if the Company, your employer or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ elects to require you
(or such other person) to remit an amount sufficient to pay such
withholding taxes, you (or such other person) must remit that amount
within three business days after the completion of the Option exercise as
provided in Section 3(a)(ii) herein. If such payment is not
made, the Company and your employer, in their discretion, shall have the
same right of set-off as provided under Section 3(e) herein with respect
to payment of the exercise price for Option
Stock.
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6.
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Headings
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The
section headings contained in these Stock Option Terms and Conditions are
solely for the purpose of reference, are not part of the agreement of the
parties and shall in no way affect the meaning or interpretation of this
Stock Option Agreement.
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7.
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References
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All
references in these Stock Option Terms and Conditions to Sections,
paragraphs, subparagraphs or clauses shall be deemed to be references to
Sections, paragraphs, subparagraphs and clauses of these Stock Option
Terms and Conditions unless otherwise specifically
provided.
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8.
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Entire
Agreement
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This
Stock Option Agreement and the other terms applicable to Stock Options granted
under the Plan embody the entire agreement and understanding between the Company
and you with respect to the Options, and there are no representations, promises,
covenants, agreements or understandings with respect to the Options other than
those expressly set forth in this Stock Option Agreement and the
Plan.
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9.
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Applicable Laws and
Regulations
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This
Stock Option Agreement and the Company’s obligation to issue Option Stock
hereunder are subject to applicable laws and
regulations.
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10.
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Successors
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(a)
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This
Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.
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(b)
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The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or
otherwise.
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ROCKWELL
▇▇▇▇▇▇▇, INC.
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By:
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▇▇▇▇
▇ ▇▇▇▇▇▇▇
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Senior
Vice President,
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General
Counsel and Secretary
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Dated:
November 20, 2009
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Exhibit
1
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Exercise
Request and Attestation Form (For Use With Already- Owned
Stock)
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Exhibit
2
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Notice
of Exercise Form
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9